By By Makini Brice
PARIS (Reuters) -Stellantis NV on Monday slashed its annual guidance, citing a deterioration in global industry dynamics and Chinese competition on electric vehicles.
The French-Italian carmaker said sales would be lower than expected in the second half of the year in most regions.
The profit warning comes days after Volkswagen (ETR:VOWG_p) cut its annual outlook for the second time in three months and likely adds pressure to the European Union as it is finalising plans on possible tariffs on Chinese electric vehicles.
Stellantis (NYSE:STLA) said industrial free cash flow is now expected to range between -5 billion and -10 billion euros, down from a prior “positive” projection.
Its adjusted profit margin is also now expected to be between 5.5 and 7.0% for the year, down from the “double digit” level previously forecast, the company said.
“Competitive dynamics have intensified due to both rising industry supply, as well as increased Chinese competition,” Stellantis said in its guidance.
The profit warning also reflects Stellantis’s decisions to “significantly enlarge remediation actions on North American performance issues”, it said, without giving further detail.
Earlier this year, Stellantis shareholders in the U.S. sued the automaker who said the firm had defrauded them by hiding rising inventories and other weaknesses before posting disappointing earnings that caused its stock price to fall.
The carmaker also announced in August that it was laying off as many as 2,450 factory workers from its assembly plant outside Detroit as it ends production of its Ram 1500 Classic truck.
